Hotels seem to be caught between a rock and a hard place. Less than a year ago, industry leaders were predicting that 2011 would be a “reasonable” year, and a return to normalcy (whatever that is) in 2012.
The tenor of opinion the last few months in most trade publications is not quite so optimistic. There are still many properties undergoing extensive renovations with the hopes of doing more business and getting higher rates, but the statistics do not bear this out. At the same time, two of the three leading research organizations are offering rosy statistics and predictions. How can this be? The answer is simple. There are a few major cities that are doing very well, Washington DC and New York in particular. When you take the country as a whole, these few primary destinations bring the average (of the hotels used in the research survey) to a much higher level. The truth is that if you eliminate the major cities, you get an entirely different perspective. Hotels are still going out of business, and City Center, an MGM property under construction in Las Vegas, providing an additional 4,800 hotel rooms has just been cancelled in mid-stream.
Feedback that we get from planners indicates that there are some very favorable deals being made, even for smaller groups. A 25-room group sent us a copy of their contract which included, among other items:
1) A Dropped Block Clause 2) Free Unlimited Ice in the Hospitality Room
3) Free Suite for the reunion planner 4) Free Parking 5) Free Airport Shuttle
New Trends?
It has long been a practice of many hotels to add a wide variety of surcharges to avoid raising room rates. While these have been more in the nuisance category, they have aggravated many people. RFN has been urging planners for some time to specifically add a clause that the room rate, other than tax, will not be
Page 46
any liquor store for two dollars cost eight dollars. On a recent cruise, where the cruise line does not pay taxes on liquor or wine; cocktails were twelve dollars; and wine which we buy at eight dollars retail was eight dollars for a glass.
Hotels are gradually getting in to this act, but generally on a lesser scale.
The Real Problem
subject to any add-on charges that are not detailed specifically in the contract.
These extra fees should not be taken lightly, as they are escalating. Airlines, for example, are raising baggage fees, especially extra bag and overweight bag fees. The highest, so far, is a charge of $480 for a 71 pound suitcase on a flight to London.
Going to a ConFAM© a few months ago,
I had packed some extra material for planner distribution. This unfortunately brought the weight of the suitcase to a one-pound overweight situation. Rather than pay the $75 overweight charge, I opened the suitcase, took out all but one copy, and threw the rest away. At the ConFAM, I showed the material, and emailed copies later to anyone who wanted it.
Charlene, our Executive VP, caught a bargain flight to Chattanooga at $33 each way from Fort Lauderdale. As it turned out, the flight did not go all the way, only to Atlanta. This meant she had to take a ground shuttle for another $60. Then there were the add-on fees from the airline; a fee for a bag, a fee for seat selection, landing fees, etc. So that $33 bargain cost nearly $200.
Alcohol Prices
There is a distinct trend toward increases in liquor prices. Planners might consider getting a commitment in future contracts spelling out alcohol prices. Most airlines have raised their prices. On a recent U.S. Air flight, for example, you could get the tonic water free, but the two oz bottle of gin to go with it, that you can buy in
As I opened this article, hotels seem to be caught between a rock and a hard place. If they raise rates, they take a big risk on losing customers. They are fighting to stay alive because economic conditions have cut down occupancy rates. The only choice for many is to start adding charges and increasing fees.
As a planner, this should dictate your negotiating strategy. Do not even try to get the rate down, because that’s where the hotel hurts the most. Accept the rate, and shoot for extras. Demand that penalty clauses disappear. Demand that clauses are mutual. Insist on the things that will make your reunion experience better.
For the majority of hotels, they want your business. They want to work with you. At the same time, they have to protect the room rate. Make up a list of the extras you want, and let the hotel people know that you are willing to pay the quoted rate as long as they give you what you need to have a successful reunion.
That’s probably the most effective strategy today. When the market turns, as it surely will, you might have to change your strategy.
New Taxes With the revenue shortfall, not only in the Federal, but in most states, you can expect to see higher hotel room taxes in many locations. In addition, President Obama has proposed an additional $100 per flight Federal air fare tax. That probably won’t fly!
paul@reunionfriendly.com R E U N I O N F R I E N D L Y N E W S • Winter, 2011-2012
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56